Chosen Thought

Archive for June, 2009

After an exhausting day at work all you desire is a moment of silence, instead, all you do is just retreat in your own home and start thinking about your family, your children’s hopes and needs, when, you might think of establishing an irrevocable life insurance trust.

Since your life goal is to secure their future, these thoughts can get over your head sometimes, so why not start looking for solutions? An irrevocable life insurance trust might be the perfect answer.

Making an idea of how it works and most of all, understanding its benefits is a must. You should contact a specialist and ask him / her to give you some advice in order to begin creating a trust. Investments coupled with insurance has become one of the most common ways that people use to their wealth planning, including wills or any other amounts of money.

Once you decide to go on with your plans, you should know a few things about the irrevocable life insurance trust as well as some of its benefits. The main purpose of the irrevocable life insurance trust is to reduce the size of your estate, and thus your estate tax liability. You will be able to protect your life policy’s value from any creditors and also to know how or when your trustee(s) get the income.

In other words you will be transferring the investment insurance ownership to your spouse or children who are being defined as the trustees. Thus you will no longer be the owner. Hence, when you die, the insurance proceeds will be deposited for the benefit of your followers.

When creating a trust you must be aware that there are some possible risks that you have to take into account. For example, if you have a life insurance policy that you own, it will be taxable upon your death, but if you don’t own it, you can’t change it or even cancel it.

If one chooses to leave his/hers insurance proceeds to a spouse, it will eventually, not be charged but the living spouse’s estate will be taxed. Creating a trust offers you the opportunity to avoid some taxes, but notice that if the insured dies within three years from the day that the policy had been signed, the proceeds will be taken into account for tax object.

Planning your estate is no small task, and making sure everything is done correctly can be critical to the financial wellbeing of your heirs and loved ones. Estate planning is more complicated than simply drafting a will. It also works to minimize taxes and other fees and sets up contingency plans for your health care should you become incapacitated. Because estate planning is literally a matter of life and death, you should only trust a qualified attorney that specializes in this field.

What Will the Attorney Do?

It’s tempting to save time and money by drafting your own will or investing in a will kit. It is impossible, however, for any of these simplified methods to accomplish all of your wishes, because every situation is unique. Also, there is not software in the world that can provide qualified advice that stems from experience. A qualified estate planning attorney will be able to help you navigate through laws governing property rights, taxes, wills, probate and trusts.

What to Look For

Only an estate planning attorney who currently practices in the related fields will be able to provide you with sound legal advice concerning your estate plan. Look for an estate planning attorney that is a member in good standing of the national bar association. Also, confirm that the estate planning attorney you are considering is up to date with continuing education requirements. Also, make sure every attorney you screen has malpractice or liability insurance, in case they make a mistake.